Lions Gate Entertainment Corporation

Good afternoon, and welcome to the Lionsgate fourth quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Nilay Shah, Executive Vice President and Head of Investor Relations. Please go ahead.

Good afternoon. Thank you for joining us for the Lionsgate Studios Corp and Lionsgate Entertainment Corp fiscal 2024 fourth quarter conference call. We'll begin with opening remarks from our CEO, John Feldheimer, followed by remarks from Vice Chairman Michael Burns and remarks from CFO Jimmy Barge. After their remarks, we'll open the call for questions. Also joining us on the call today are COO Brian Goldsmith, Chairman of the TV Group Kevin Beggs, Chairman of the Motion Picture Group Adam Fogelson, and President of Worldwide TV and Distribution Jim Packer. And from Starz, we have President and CEO Jeffrey Hirsch, CFO Scott McDonald, and President of Domestic Networks Allison Hoffman. The matters discussed on the call also include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the risk factors set forth in our public filings for Lionsgate Studios Corp and Lionsgate Entertainment Corp. The companies undertake no obligation to publicly release the result of any revision to these forward-looking statements that may be made to reflect any future events or circumstances. I'll now turn the call over to John.

Thank you, Nealey, and good afternoon, everyone. Thank you for joining us. I'm speaking today as CEO of both the consolidated parent company Lionsgate Entertainment Corp. and Lionsgate Studios, as we now have two public companies trading in the market. When Jimmy presents the consolidated financial results of the parent company in a few minutes, he'll include the separate operating results of the Lionsgate Studios segments. Turning to my remarks, we had a great year. We completed four major transactions, moved closer to a value-defining separation of our studio and stars, exceeded our numbers, strengthened our content pipelines, and grew our library to record levels. We accomplished all of this in the face of two strikes and unprecedented industry disruption. Let's look at the fiscal year highlights. Last week, we launched Lionsgate Studios as a pure play, publicly traded company, positioned right in the sweet spot of the entertainment business, creating, owning, and distributing great content. We believe that it has all of the ingredients to live up to its ticker symbol, LION. In December, we closed the acquisition of E1, and it is already deepening our library, strengthening our Canadian production initiatives, diversifying our television group, and allowing us to efficiently scale Lionsgate Alternative Television into an unscripted powerhouse. Our motion picture group reported its best segment profit in 10 years, driven by the latest installments of The Hunger Games, John Wick, and Saw franchises, a robust multi-platform release business, and a strong library performance. Our ability to convert films to profitability in all parts of the business continued last weekend with a strong opening of The Strangers, Chapter 1. Our television group has rebounded from the strike with seven series orders and renewals and 27 new shows sold into development in recent months. Earlier this week, we partnered with Amazon MGM Studios to announce the development of a Nurse Jackie sequel starring Edie Falco, an executive produced by Edie and Bob Greenblatt, the first of several franchise properties we're bringing to the market this spring. Our film and television library reported a record $339 million revenue quarter, bringing trailing 12-month revenue to $886 million. This performance was driven by strength across the board. Top properties from third-party creators like The Conners and The Chosen, the SVOD syndication of our hit comedy Ghosts on CBS, and evergreen titles from our deep library. Starz continues to drive its successful transition to digital, ending the fiscal year with 64% of its revenue coming from streaming, with 70% anticipated by the end of the fiscal year. It remains one of the only profitable pure play premium networks in the business. And finally, we ended the fiscal year on a strong financial note, raising $350 million in gross proceeds from our Lionsgate Studios transaction and completing our bond exchange agreement to help prepare the studio and Starz balance sheets for full separation. Assuming we meet the financial targets to which we've previously guided, we expect to end the fiscal year with our studio leverage in the low threes. Looking at our individual businesses, coming out of the strike, our motion picture group has been putting together one of our strongest production slates in years, driven by a roster of world-class talent. Graham King producing and Antoine Fuqua directing Michael, the Michael Jackson biopic. Chad Stahelski directing Highlander, while continuing to grow the John Wick franchise in both film and television. Blumhouse following up its partnership with Lionsgate on Imaginary with a multi-picture deal, reimagining several of our horror classics. Hunger Games filmmaker Francis Lawrence following up Ballad of Songbirds and Snakes by directing the film adaptation of Stephen King's The Long Walk. Ruben Fleischer in pre-production on Now You See Me 3. Destin Daniel Cretton prepping the adaptation of the blockbuster manga property Naruto. And Margot Robbie and Lucky Chap Entertainment developing Monopoly. Turning to television, we're witnessing the most profound industry disruption in recent memory. Shows being canceled or unrenewed. Changes in buying patterns and buyer mix. The ad market abruptly transitioning from linear to digital. Fewer network series pilots and the after effects of the strikes changing the calculus of our business in ways that are continuing to unfold. Here's why we're a little less concerned about this disruption. First, we're taking advantage of our diversification with growing contributions from E1, 3Arts, and our newly restructured unscripted business, all helping us to weather pressure on any single part of the business. We're cultivating new buyers like MGM+, AMC+, Disney+, FX, and Amazon Prime alongside our longstanding relationships with platforms like Apple TV+, Netflix, Hulu, Peacock, and the broadcasters. We're innovating new business models that draw upon our ability to create noisy, brand-defining series like Seth Rogen's half-hour comedy, The Studio, for Apple TV+, as well as cost-effective international acquisitions and co-productions like Son of a Critch and Population 11. And we remain a prolific supplier of premium scripted series to stars. With the reimagining of their hit series Spartacus, House of Asher going into production this week in New Zealand. And the sexy thriller The Hunting Wives currently shooting in North Carolina for a fiscal 26 network debut. We believe that Lionsgate Television's history of working closely with stars provides our television group with a unique understanding of the platform's specific programming needs and an unparalleled ability to collaborate with them in crafting efficient business models. This will continue to drive our relationship with stars after the separation. Turning to stars, we had a solid quarter with OTT subscribers holding steady, churned down, revenue up for the third consecutive quarter and continued profitability. At a time when the streaming world has shifted its preferred metric from subscriber growth to profitability, I want to remind everyone that Starz has always been profitable. In fact, Starz has executed a successful transformation to digital while holding overall revenue steady and remaining profitable. This in the face of a more than 60% decline in linear revenue over the past seven years. On the programming front, Star's core group of premium series, Ghost, Raising Canaan, Force, BMF, P-Valley, and Outlander, are performing at levels comparable to any group of shows on any network. Family crime drama BMF had a strong premiere in the quarter that drove a 15% increase in viewership and achieved its strongest subscriber growth of the series. Power Book 2 Ghost will close out the fiscal first quarter on a strong note, with its season 4 debut on June 7th. Franchise extensions like the prequel series Power Origins and Outlander Blood of My Blood are in the pipeline for next year, and the network continues to ramp its offering of studio movies from its pay-one and pay-two output deals, helping to drive Starz subscriber acquisitions and retention. In closing, last week's launch of Lionsgate Studios is more than just an opportunity to shine a light on the tremendous value of the content we're creating, owning, and delivering. It's also an important step forward in fully separating our studio and stars by the end of the calendar year in order to simplify our structure, unlock opportunities to scale our respective businesses, and create incremental value for our shareholders. Now I'd like to turn things over to Michael to discuss our next steps in separating the two companies. Michael?